FDI and spillovers in China: non-linearity and absorptive capacity
Using a fixed effect variance decomposition model we estimate SUR models to analyse FDI spillovers from contagion and spillovers from competition on local firms in China. While the former type of spillover mainly depends on the degree of foreign presence, the latter kind is related to how foreign and local firms interact. The main conclusion is that FDI has been beneficial for the Chinese economy but that spillovers are not evenly distributed across firms and industries. Spillovers from contagion tend to exhibit an inverse U-shaped pattern with respect to the degree of foreign presence at the industry level, whereas spillovers from competition are more linear. Industries with high absorptive capacity and/or high efficiency are the ones best equipped to take advantage of spillovers from foreign-owned firms.
Volume (Year): 9 (2011)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RCEA20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RCEA20|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ari Kokko, 1996. "Productivity spillovers from competition between local firms and foreign affiliates," Journal of International Development, John Wiley & Sons, Ltd., vol. 8(4), pages 517-530.
- Liu, Zhiqiang, 2008. "Foreign direct investment and technology spillovers: Theory and evidence," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 176-193, February.
- Jensen, Richard & Thursby, Marie, 1986. "A strategic approach to the product life cycle," Journal of International Economics, Elsevier, vol. 21(3-4), pages 269-284, November.
- Christer Ljungwall & Patrik Gustavsson Tingvall, 2010.
"Is China different? A meta-analysis of the effects of foreign direct investment on domestic firms,"
Journal of Chinese Economic and Business Studies,
Taylor & Francis Journals, vol. 8(4), pages 353-371.
- Ljungwall, Christer & Gustavsson Tingvall, Patrik, 2008. "Is China Different? A Meta Analysis Of The Effect Of Foreign Direct Investment On Domestic Firms," Working Paper Series 2008-2, China Economic Research Center, Stockholm School of Economics.
- Horstmann, Ignatius J & Markusen, James R, 1987. "Strategic Investments and the Development of Multinationals," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 28(1), pages 109-121, February.
- Barbara J. Spencer & James A. Brander, 1983.
"International R & D Rivalry and Industrial Strategy,"
Review of Economic Studies,
Oxford University Press, vol. 50(4), pages 707-722.
- Barbara J. Spencer & James A. Brander, 1982. "International R&D Rivalry and Industrial Strategy," Working Papers 518, Queen's University, Department of Economics.
- Barbara J. Spencer & James A. Brander, 1983. "International R&D Rivalry and Industrial Strategy," NBER Working Papers 1192, National Bureau of Economic Research, Inc.
- Horstmann, Ignatius J & Markusen, James R, 1989. "Firm-Specific Assets and the Gains from Direct Foreign Investment," Economica, London School of Economics and Political Science, vol. 56(221), pages 41-48, February.
- Koizumi, Tetsunori & Kopecky, Kenneth J., 1977. "Economic growth, capital movements and the international transfer of technical knowledge," Journal of International Economics, Elsevier, vol. 7(1), pages 45-65, February.
- Ronald Findlay, 1978. "Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model," The Quarterly Journal of Economics, Oxford University Press, vol. 92(1), pages 1-16.
- Magnus Blomstrom & Jian-Ye Wang, 1989.
"Foreign Investment and Technology Transfer: A Simple Model,"
NBER Working Papers
2958, National Bureau of Economic Research, Inc.
- Wang, Jian-Ye & Blomstrom, Magnus, 1992. "Foreign investment and technology transfer : A simple model," European Economic Review, Elsevier, vol. 36(1), pages 137-155, January.
- Kokko, Ari, 1994. "Technology, market characteristics, and spillovers," Journal of Development Economics, Elsevier, vol. 43(2), pages 279-293, April.
When requesting a correction, please mention this item's handle: RePEc:taf:jocebs:v:9:y:2011:i:1:p:1-22. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.